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The Need for 100 New Buffetts, Rockefellers, and Gates'

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Today, more than half of the world's population lives in cities. In the next 30 years, over one billion people are expected to become urban dwellers. This rapid growth in urbanization poses a great challenge for the future cities when it comes to housing, employment, education, mobility, urban planning and the environment. New ideas, new solutions and innovation that can help us ensure a sustainable urban future are thus in high demand.

By the end of this month, some 500 hundred philanthropists will convene in Copenhagen to discuss in which way the philanthropic sector can and should play a role in ensuring the sustainable cities of tomorrow. The conference, hosted by EFC, will cover a wide range of societal, social and environmental challenges that the cities of today are facing. During the three-day conference the participants will share knowledge and discuss new ways of working, new partnerships and new ways of measuring philanthropic impact that hopefully will open the door to a more active and visible philanthropic sector when it comes to creating a future sustainable society.

This meeting could signal a new beginning. Currently, the future of the world is stuck in no man's land -- who has the responsibility to find the necessary solutions to the world's growing challenges? The lacking outcome of the many meetings in G8 and G20 serve as great examples of the power vacuum that exists in this area. While our future continues to look more and more gloomy, our leaders seem more and more apathetic. Governments but also companies mostly focus on short term results e.g. the next election or the next quarterly report. Meanwhile, the knowledge institutions keep their heads in the books focusing on testing long term hypothesis.

Thus, we are currently in desperate need of new change-makers -- of innovative catalysts that are able to shake things up, create a new momentum and take responsibility for solving the growing social and environmental challenges that the world is facing.

Hoping that the foundations could become a new kind of change maker is not an unrealistic dream. The coming meeting bears witness to a significant change, which in recent years has created a stir in the entire philanthropic sector. Around the world, a number of front running philanthropists are moving forward and taking upon a new role as catalysts for major social changes. Philanthropists such as Bill Gates, Warren Buffett and David Rockefeller have set new standards, created progress and solutions that have given the concept of philanthropy a renaissance. In this new form of philanthropy, philanthropists no longer see themselves as generous donors, but as catalytic partners, who take responsibility for putting complex challenges on the agenda. The name of this new philanthropic approach is catalytic philanthropy.

Catalytic philanthropy holds great potentials as a vehicle for great and very much needed change. Especially in a time where both public and private funds are in deficit and the debate about the world's growing problems has taken more than a few serious hits. In this gloomy atmosphere, the catalytic foundations represent a much needed group of new players that can help rethink and revitalize the way we talk and act upon the world's greatest challenges. This is crucial if we are to hope for a profound progress in the acceleration of a more sustainable transition in the coming years.

In regards to creating new solutions that can lead us towards a sustainable future, we can allow ourselves to expect great things from the philanthropic sector. They are independent and have a long-term horizon, financial resources and a focus on doing good. The special DNA of the foundations gives them a unique opportunity to take risks, drive experiments and focus on innovation because they are not as politicians subject to the short-term political pressures of elections nor as the private sector obliged to achieve economic returns. This gives foundations the freedom to engage in more uncertain and experimental projects, where success is not a foregone conclusion. They thus bring a unique set of competencies to the table when it comes to driving change and finding new sustainable models.

But when it comes to take on the role as change agents in development of solutions for large, complex societal challenges, not one, two or three foundations will have near enough power and capital to do so. Although several foundations, which currently work with catalytic philanthropy, have billions on their bank accounts, their fortunes will not last long when it comes to tackling challenges such as sustainability, poverty and urbanization. An example: Although the total donations from philanthropic foundations in the United States in 2011 reached $41 billion, it would only be enough to cover the country's public spending for four days.

The foundations cannot achieve immense results by acting on their own and this is why the catalytic approach is so interesting. Catalytic philanthropy it is not about how much you give, but how you give. The catalytic foundations have realized that they can make a big difference, not by writing checks, but by offering their competencies, network and way of thinking as a new form of capital. By doing so, they bring forth innovative capital that opens the door to great changes and improvements in society. Imagine what change we could gain from 100 philanthropists thinking and working as Bill Gates, Warren Buffett or David Rockefeller.

Despite the positive trends, the catalytic approach is still a model pursued by only a limited group within the philanthropic sector. Today, only about 10 percent of the American foundations are basing their work on catalytic philanthropy. The philanthropic sector as a whole remains at a modest stage of development in terms of being catalysts for bigger social changes. Thus the philanthropic sector's potential is much bigger. Many foundations have the ability and the means to choose the catalytic path and by doing so generate greater value from their fortunes in terms of doing good. It is important that the foundations take on this responsibility. There is a growing need in society for new agents of change, but also a self-interest for the foundations, because the catalytic approach represents a driver for increasing the outcome of their investments and work -- and thereby helping foundations fulfill their mission of doing good.

The coming EFC meeting represents a good option for more foundations to take upon the role as the new change makers -- to initiate and commit themselves to having bigger and more ambitious goals when it comes to making a difference. If they do so, it could have core shaking influence on societies around the world. This could open the door to a new momentum, where the foundations play the role as the innovative force we have been waiting for in solving the growing global challenges and getting closer to the sustainable society of tomorrow.

From May 30 to June 1, 2013, some 500 foundations and partners will convene in Copenhagen, Denmark for the 24th EFC Annual General Assembly and Conference, entitled "Sustainable Cities: Foundations and our urban future." Read more about the conference here.

Read a new publication about catalytic philanthropy here. It will be published on May 30.

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